PayPal (PYPL 1.32%), once heralded as a harbinger of a cashless future, now exists in a curious state of decline. A mere five years ago, the whispers spoke of exponential growth, of a digital empire reshaping the very fabric of commerce. Now, the numbers tell a different tale – a nearly eighty percent descent in its stock value, a chilling testament to the capricious nature of the market. The weight of competition, the severing of ties with eBay (EBAY +0.07%), and the pervasive anxieties of the macroeconomic climate have conspired to throttle its ascent, leaving it gasping for air in a sea of rivals.
From 2021 to 2025, the expansion of its active accounts was a paltry increase from 426 million to 439 million. A pathetic growth, considering the grand ambitions of reaching 750 million by 2025 – a goal abandoned, like a discarded faith. It strives now to compensate, to force more transactions through its branded checkout, the ephemeral Venmo, debit cards, and the siren song of “buy now, pay later” services. But is this merely a desperate attempt to delay the inevitable, to rearrange the deck chairs on a sinking vessel?
It shrinks its higher-volume, lower-value platforms – Braintree amongst them – as if to cauterize a spreading wound, attempting to stabilize margins and transaction rates. Cost-cutting measures and aggressive share repurchases – a palliative, perhaps – to artificially inflate earnings per share as top-line growth falters. But even with these contortions, the forecast for 2026 remains bleak: a mid-single-digit decline in EPS. The stock, seemingly cheap at nine times this year’s earnings, may simply be reflecting its true worth – a discounted existence. Is it not wiser, then, to turn one’s gaze towards a more robust entity, a financial titan with a deeper moat: American Express (AXP 2.02%)?
The Illusion of Choice: Why American Express Endures
American Express is often grouped with Visa (V 0.68%) and Mastercard (MA 0.46%), yet it operates on a fundamentally different plane. Visa and Mastercard are mere intermediaries, facilitators of transactions, content to partner with banks and collect “swipe fees.” They do not bear the weight of direct responsibility, the risk of extending credit. American Express, however, is both card issuer and network operator, a dual existence that imbues it with a peculiar strength. It backs its own cards, carries the burden of its own balance sheet, and reaps the rewards of interest earned on those accounts.
It is insulated from the capricious winds of interest rate fluctuations. When rates rise, its net interest income swells. When they fall, card processing fees increase as consumer spending accelerates. A closed loop, a self-sustaining system, a fortress against the storms of the market. It is a beautiful, almost unsettling, symmetry.
American Express serves fewer cardholders than its rivals, but its focus on a more affluent, less risky clientele allows for steady, almost inexorable, growth. Analysts predict an EPS growth of 15% CAGR from 2025 to 2028. A robust rate for a stock trading at just 17 times this year’s earnings. And I suspect – with a growing conviction – that it will continue to outperform PayPal and many of its peers for the foreseeable future. It is not merely a matter of numbers, but of character, of resilience, of an enduring strength that seems, in this age of fleeting trends, almost… unsettling.
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2026-03-07 21:52